That's still an improvement over the Pension Benefit Guaranty Corp.'s midyear record deficit of $33.5 billion, which soared as automakers and other companies faltered and caused the insurance fund's liabilities to spike.

Yet experts say the long-term picture is grim. They say that without major changes, such as higher insurance premiums and less risky investments, the fund will require a taxpayer bailout.

"We could face much higher deficits in the future," acting director Vincent Snowbarger said. "We won't fail to meet our obligations to retirees, but ultimately we will need a long-term solution."

The agency's finances this year have been battered by the economy, which put it on the hook for 144 new pension plans that failed during the fiscal year that ended Sept. 30. That compares with 67 in the previous year.

Low interest rates added to the sea of red ink, because the PBGC can't count on inflation driving down the value of future payouts. It also faced losses on stock investments made by investment advisers and by the pension funds it has taken over — though the recent market rally has helped the corporation net an investment return of 13.2 percent for the year.

These fluctuations can hide the fundamental problems with the pension insurance system, said Bradley Belt, a former PBGC executive director and now CEO of the financial consulting firm Palisades Capital Advisors LLC.

"People focus too much on what the number is," Belt said. "A lot of what's going on is bookkeeping or accounting that mask, unfortunately, the long-term problem."

The PBGC is responsible for the benefits of 1.5 million Americans and sends checks each month to 740,000 pensioners. It is funded entirely by fees on the companies whose pensions it insures.

But Congress sets those fees, and it's been reluctant to raise them in the face of opposition from business and labor groups. Because the fund isn't expected to run out for a decade or more, there is little impetus to raise rates now.

Indeed, some lawmakers have introduced legislation that experts say could further expand the PBGC's deficit. A bill introduced last month by Rep. Earl Pomeroy, D-N.D., and others would allow employers to reduce contributions to pension funds.

The bill is intended to reduce companies' costs so they can withstand the recession and support an economic recovery. But it also could force the PBGC to take over some liabilities from plans that cover multiple employers. Under the current system, those costs are covered by the remaining companies if one partner in a pension plan goes bankrupt.

Congress' reluctance to increase costs to employers has led to growing shortfalls. The PBGC has been in the red for 29 of its 35 years of operation. The fund still has plenty of money to operate now. But unless pension funds adopt less risky investment strategies or Congress raises insurance premiums, it eventually will run out of money to pay the pensioners it supports.

That would force Congress to choose between bailing out the fund and depriving more than a million people, many of them elderly, of a key income source. Experts say an eventual bailout is almost inevitable.